The New Internet Economy: A Chat With Alibaba CTO Wang Jian

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It’s totally wrong.

The second thing is, because we are so successful in our business, a lot of people know Alibaba because of some of the numbers we have, like what we did for the Nov. 11 events [when more than $5.7 billion of sales occurred on the company’s platforms during what is known as Singles’ Day, a shopping spree that has become something akin to Cyber Monday]. But—the best part of my job—they probably ignore the technology we’ve grown in our company.

X: Seattle is establishing itself as one of the world’s cloud computing capitals, thanks mainly to Microsoft, Amazon, and the research at the University of Washington. That’s a part of the Alibaba business that you led from its inception until last September. What does Alibaba Cloud Computing look like? How does it compete with the big players people might be more familiar with here?

WJ: When we started our cloud computing business, we are not [really doing it] because we know somebody else is doing it. What we are really competing with is Walmart. Actually, it’s not Walmart itself. We view [ourselves] as an Internet economy, and we view Walmart as more like traditional economy. So basically it’s the new economy competing with the old economy.

If you look at Walmart, or the traditional economy, you can see that Walmart changed the manufacturers in a very broad sense. If you think about traditional manufacturing, you really can see that electricity played a very important role in that. You can see that without electricity, as a utility, there’s no such company called Walmart. If we do believe the Internet economy is the future of the world, then we convinced ourselves actually that computing as a utility is really the power for the future Internet economy. So that’s how we view cloud computing.

When we started, we believed that. Actually, when I started the Alibaba Cloud Computing company, I was thinking about whether we should call it cloud computing or not. I don’t think cloud computing is the right word to capture the essence of what I described. I was thinking about whether we could have a name for the company like General Computing, just like General Motors.

I think our competition is not really the direct competition with AWS or Microsoft. The challenge for us is how we can support this Internet economy. Again, we are competing with electricity instead of with the other cloud computing services.

X: Alibaba Group’s businesses are broad and diverse, organized into some 25 business units. How do you manage technology strategy across such a large organization?

WJ: Thinking about electricity, if you want to have an analogy, you can see that electricity in the States is not different from electricity in China. Mainly it’s the same. The only difference is in the voltage, and the plug, but that’s not really the big deal. So, you can see that computing is the same, fundamentally. The only difference is just the plug and some voltage.

That’s good for some businesses. Right now, the different plugs and also converters is a big business. But it’s a waste of resources for the world. So what we need to figure out is, OK, what’s the best way for us to have the general computing supply to support for different businesses, without different plugs and different voltages. That’s basically what I’m doing. What I really push in the company is that we have a shared computing infrastructure. Every software company knows that. It’s just basically whether you are determined to do it.

X: As a data-driven company, how does Alibaba make decisions to move into new business areas?

WJ: In a strategy meeting that we had in 2008, we defined Alibaba as a data company, not just an e-commerce company. It was a long time before big data becomes a buzzword. Before we had this word called data, another buzzword is information. When you’re talking about information, you’re really talking about the second-hand thing. Raw data is more important than something that is digested by somebody else.

The second thing is—why we think we are a data company instead of an information company—we know that actually we just provide a platform and infrastructure for the people to use data. We believe actually that the person who uses the data is smarter than us [and] they can get much more useful information from the data that we have.

The third thing is, we believe data has to be exchanged to get more value from the data, just like the money has to [flow] to get more value from the money.

In terms of the business, we strongly believe that if you just use the data to optimize your existing business, it is not enough. It’s still not big data. The value of data is actually to help you create something new, you never knew before.

X: The company has as one of its top goals “to become the first platform of choice for sharing data.” In the U.S. nowadays, that kind of a goal necessarily brings up a discussion about privacy. How big of a concern is data privacy for your customers in China?

WJ: I think the privacy is always an issue. Even without the big data, it’s an issue. I always say if you move from your village to your apartment, actually you are losing your privacy. Basically, everybody knows you now. Privacy is not just a problem of the Internet, it’s everywhere. But you chose to lose your privacy because of convenience, because of some other benefit. Certainly we need to keep the privacy for our customers. But I would say, even more important, what’s the value you bring to your customers?

X: Which company is a bigger competitor to Alibaba now, Tencent or Amazon?

WJ: I think the company with the most innovation is going to be the most competitive for us. I don’t think that actually, for a company like Alibaba, we are really competing with other companies in terms of the business, but basically we are competing in innovation. Who is the company that actually innovates the most?

X: Alibaba is hiring in some high-demand specialty fields, such as data scientists and machine learning engineers. As you look for that talent, are you planning to open any additional engineering or research centers in the U.S.?

WJ: When I first started our cloud computing company, we did have a very small R&D group in Silicon Valley. So, we [would] definitely consider that. Actually the No. 1 reason to have a team in the U.S. is not just because we want to have a couple people, [but] because we want to bring a different perspective into the company.

The thing that really surprised me, at least from my very short experience in the last three days, I really feel that Seattle is kind of the hub for online innovation. That’s the best way for me to describe it. So I think it might be good [to open an office here focused on R&D]. This is not the purpose of my trip, but after these days, I may change my mind and seriously consider it.

X: How does Alibaba interface with the U.S. startup and innovation community? Are you engaged in anything like seed-stage investing, company or technology incubation, or acquisitions?

WJ: Yes, actually, we just formed a team almost six months ago, a U.S. team that’s very much focused on investments in the United States, in particular startups. Their offices are in downtown San Francisco.

X: What is their mandate?

WJ: For us it’s just a learning experience. We just started that. A few months ago we invested in a company called Quixey. [Alibaba led a $50 million Series C round in the app search engine company based in Mountain View, CA.] I don’t think that we have a specific number or a specific agenda. But it’s how we get to know the innovation here, get to know the people here, get to know the companies here.

X: Do you encourage third-party developers to develop on the broad Alibaba platform? Are there APIs [application programming interfaces] that you publish?

WJ: Yes. Fundamentally, Alibaba is a platform company, for the whole business. Even with our e-commerce platform, we are not like Amazon. … Next Page »

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